Retail banks first felt the heat from consumers demanding a better client experience. Accustomed to online shopping and mobile communications, people wanted their financial institutions to help them digitally interact and conduct transactions. Recognizing that all corporate clients are also consumers, corporate and institutional banks are beginning to realize that they need to leverage the advances they made on the consumer side of the business to manage client expectations and remain competitive.

It shouldn’t come as a surprise – if CFOs of major corporations enjoy banking on the go in their personal lives, why wouldn’t they expect the same convenience, mobility, and connectivity interacting with banks in business? Unfortunately, most corporate banks aren’t quite there yet.

At the recent Sibos conference in Toronto, attendees said this gap is a problem. Quite a few told me with no hesitation that the client experience in institutional banking needs to change and evolve. Corporate banks, they argued, need to deliver an optimal digital experience to corporate users, who account for much of each bank’s revenues. The status quo – limited online banking and mobile access – isn’t enough.

Partnering for innovation

What do clients want? Think about that CFO. Let’s say the executive is in a meeting and receives a batch of wire transfers for approval. Instead of walking back to the office to finalize the transfers on a desktop, the CFO wants to handle them instantly on a mobile device.

And mobility is just the beginning. Clients also want their banks to deliver real-time visibility into each day’s financial transactions. By being able to view the company’s liquidity position – in real time, at any time – users can make more informed cash-management decisions.

To deliver these services and others that would help corporate clients excel, banks need to develop new products and services to meet the needs of a digitally engaged clientele. However, creating a digital experience requires more than simply making legacy processes available online. It demands real innovation from commercial banks who want to thrive in the digital economy. For some institutions, working with financial technologies (fintechs) might be an effective way to innovate.

Fintechs can identify where institutional banks may fall short in delivering an engaging client experience. Then they can develop functionality that closes the gap between traditional processes and what today’s corporate clients really want.

Although fintechs have traditionally been viewed as competitors to banks, that perspective may be shortsighted, says one finance executive in a recent TechCrunch article. “Contrary to the common belief,” says Naveed Sultan, global head of treasury and trade solutions for Citigroup, “I think there is more opportunity for collaboration with fintech than disruption, particularly on the institutional side.”

Connecting corporate banking systems to clients’ ERP solutions

One problem is that fintech solutions are typically built on advanced, next-generation information technology. Banks’ legacy systems, on the other hand, may date back to the last millennium.

To get the most value from fintech innovations – and dramatically improve the client experience – commercial banks need to embrace next-generation digital technology. By deploying open, cloud-based banking systems, institutional banks can make it easier to work with fintech firms and deploy innovative, modern technology solutions that engage and satisfy today’s corporate clients.

One example is the ability to create direct connectivity between the ERP solutions of corporate banks and those of their clients. Instead of asking clients to send payment files through traditional means to the bank, several Sibos attendees said they want to connect digitally with clients’ ERP systems. This type of corporate-to-bank (or multibank connectivity) would create a better digital experience, save time, reduce errors, and decrease processing costs.

Creating digital connections to their corporate clients will enable banks around the world to realize new efficiencies and savings. That’s an all-around win-win that will really add fuel to the fire of digital transformation.

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